An American lawyer accused of swindling $500,000 (£316,000) from Gayle Dunne, the wife of indebted developer Sean Dunne, has been sacked as trustee of a property that she is developing.

New York lawyer Philip Teplen was replaced as trustee of the $2m (£1.3m) property, which is located in an exclusive residential area of Greenwich, Connecticut, in recent days.

Plans to remodel the property are in limbo after a row erupted between Mrs Dunne and Mr Teplen over the alleged missing money.

His replacement as trustee has been named as local lawyer Thomas Heagney

The remodelling project has caused considerable controversy among residents in Greenwich, amid allegations that excessive demolition work took place on the property.

Local planning authorities issued a 'stop work' order last October.

The Dunnes moved to Greenwich last year, although Sean Dunne commutes regularly between the US and Ireland in order to manage his business interests here.

He says that he owns no property in the US. However, his wife has revealed in court papers that she is setting herself up as a property developer and lists the building, 38 Bush Avenue, as her home address in company office records. She has refused to say whether or not she is the property's owner.

Mr Dunne, who paid €379m (£320m) for two Dublin hotels during the boom, is dealing with NAMA and also owes significant sums to non-NAMA banks.

Mr Teplen was initially hired by Mrs Dunne to help her apply for an investment visa. To support the application she put $500,000 of her own funds in an escrow account controlled by Mr Teplen.

However, when she sought to use the money in a deal last December, Mr Teplen allegedly failed to return the cash.

Mrs Dunne subsequently lodged a lawsuit against the lawyer in the New York State Supreme Court and has secured an order compelling Mr Teplen to produce the money or a convincing reason why he does not have it.